Decision to ease FDI in space sector to boost startup ecosystem in satellite making, assembly

Beyond 49 per cent, FDI in these activities would require government approval, it added.

Further, up to 100 per cent overseas investments are permitted under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground, and user segments.

Sreeram Ananthasayanam, Partner, Digital Govt and Space Tech Leader, Deloitte, said that this amendment is also expected to give a fillip to the burgeoning downstream/user segment of the space sector value chain which leverages India’s natural talent in IT/analytics and needs of the growing economy of our country.

“The policy will definitely help and further fuel the efforts of our nascent start-up ecosystem in launch vehicles, satellite manufacturing and assembly, and downstream application development,” he said.

Ananthasayanam added that the FDI policy with a varied approach towards various segments of the space value chain, definitely strikes a balance between the investment needs of the emerging Indian private space ecosystem, the strategic autonomy of the country, and the overall ambition of developing indigenous capabilities across the space value chain.

Mayank Arora, Director- Regulatory, Nangia Andersen India, said that collaborations of Indian space startups with foreign players and the potential technology transfer going forward will help establish an ecosystem in the sector.

The decision assumes significance as demand for satellite components and parts is growing because almost all major space agencies are looking to ramp up the production of heavy-lift launch vehicles.

As per estimates, over 200 startups are engaged in the sector.

According to industry estimates, the private space sector in India accounts for about two per cent of the global space economy and is projected to grow to about 10 per cent by 2040.